A verdadeira luta pelo futuro da economia global
Branko Milanovic
Branko Milanovic é Pesquisador Sênior do Stone Center on Socio-Economic Inequality do CUNY Graduate Center e Professor Centenário da London School of Economics.
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| David Plunkert |
O capitalismo domina o mundo. Com pouquíssimas exceções, todo o planeta organiza a produção econômica da mesma maneira: o trabalho é voluntário, o capital está majoritariamente em mãos privadas e a produção é coordenada de forma descentralizada e motivada pelo lucro.
Não há precedentes históricos para esse triunfo. No passado, o capitalismo — seja na Mesopotâmia no século VI a.C., no Império Romano, nas cidades-estado italianas na Idade Média ou nos Países Baixos no início da era moderna — teve que coexistir com outras formas de organização da produção. Essas alternativas incluíam a caça e a coleta, a agricultura em pequena escala por camponeses livres, a servidão e a escravidão. Mesmo há apenas 100 anos, quando a primeira forma de capitalismo globalizado surgiu com o advento da produção industrial em larga escala e do comércio global, muitos desses outros modos de produção ainda existiam. Depois, após a Revolução Russa de 1917, o capitalismo dividiu o mundo com o comunismo, que reinava em países que, juntos, continham cerca de um terço da população mundial. Agora, porém, o capitalismo é o único modo de produção remanescente.
É cada vez mais comum ouvir comentaristas no Ocidente descreverem a ordem atual como "capitalismo tardio", como se o sistema econômico estivesse prestes a desaparecer. Outros sugerem que o capitalismo enfrenta uma ameaça renovada do socialismo. Mas a verdade inescapável é que o capitalismo veio para ficar e não tem concorrentes. Sociedades ao redor do mundo abraçaram o espírito competitivo e aquisitivo inerente ao capitalismo, sem o qual a renda diminui, a pobreza aumenta e o progresso tecnológico desacelera. Em vez disso, a verdadeira batalha ocorre dentro do capitalismo, entre dois modelos que se confrontam.
Frequentemente na história da humanidade, o triunfo de um sistema ou religião é logo seguido por um cisma entre diferentes variantes do mesmo credo. Depois que o cristianismo se espalhou pelo Mediterrâneo e pelo Oriente Médio, foi dividido por ferozes disputas ideológicas, que eventualmente produziram a primeira grande fissura na religião, entre as igrejas oriental e ocidental. O mesmo aconteceu com o islamismo, que, após sua expansão vertiginosa, rapidamente se dividiu em ramos xiita e sunita. E o comunismo, rival do capitalismo no século XX, não permaneceu monolítico por muito tempo, dividindo-se em versões soviética e maoísta. Nesse aspecto, o capitalismo não é diferente: dois modelos predominam atualmente, diferindo em seus aspectos políticos, econômicos e sociais.
Nos países da Europa Ocidental e da América do Norte, bem como em diversos outros países, como Índia, Indonésia e Japão, predomina uma forma liberal e meritocrática de capitalismo: um sistema que concentra a vasta maioria da produção no setor privado, supostamente permite a ascensão de talentos e busca garantir oportunidades para todos por meio de medidas como educação gratuita e impostos sobre herança. Paralelamente a esse sistema, existe o modelo político de capitalismo liderado pelo Estado, exemplificado pela China, mas também presente em outras partes da Ásia (Mianmar, Singapura, Vietnã), na Europa (Azerbaijão, Rússia) e na África (Argélia, Etiópia, Ruanda). Esse sistema privilegia o alto crescimento econômico e limita os direitos políticos e cívicos individuais.
Esses dois tipos de capitalismo — com os Estados Unidos e a China, respectivamente, como seus principais exemplos — invariavelmente competem entre si devido à sua profunda interligação. A Ásia, a Europa Ocidental e a América do Norte, que juntas abrigam 70% da população mundial e 80% da sua produção econômica, estão em constante contato por meio do comércio, do investimento, da movimentação de pessoas, da transferência de tecnologia e da troca de ideias. Essas conexões e colisões geraram uma competição entre o Ocidente e partes da Ásia, que se intensifica devido às diferenças em seus respectivos modelos de capitalismo. E é essa competição — não uma disputa entre o capitalismo e algum sistema econômico alternativo — que moldará o futuro da economia global.
Em 1978, quase 100% da produção econômica da China provinha do setor público; esse número caiu para menos de 20%. Na China moderna, assim como nos países ocidentais mais tradicionalmente capitalistas, os meios de produção estão majoritariamente em mãos privadas, o Estado não impõe decisões sobre produção e preços às empresas e a maioria dos trabalhadores são assalariados. A China se destaca como positivamente capitalista em todos os três aspectos.
O capitalismo não tem rival atualmente, mas esses dois modelos oferecem maneiras significativamente diferentes de estruturar o poder político e econômico em uma sociedade. O capitalismo político concede maior autonomia às elites políticas, ao mesmo tempo que promete altas taxas de crescimento para as pessoas comuns. O sucesso econômico da China mina a alegação do Ocidente de que existe uma ligação necessária entre capitalismo e democracia liberal.
O capitalismo não tem rival, mas suas duas variantes oferecem maneiras significativamente diferentes de estruturar o poder político e econômico.
O capitalismo liberal tem muitas vantagens bem conhecidas, sendo as mais importantes a democracia e o Estado de Direito. Essas duas características são virtudes em si mesmas e ambas podem ser creditadas por incentivar um desenvolvimento econômico mais rápido, promovendo a inovação e a mobilidade social. No entanto, esse sistema enfrenta um enorme desafio: o surgimento de uma classe alta autoperpetuante, juntamente com a crescente desigualdade. Isso representa agora a ameaça mais grave à viabilidade de longo prazo do capitalismo liberal.
Ao mesmo tempo, o governo da China e os de outros Estados capitalistas políticos precisam gerar crescimento econômico constantemente para legitimar seu governo, uma compulsão que pode se tornar cada vez mais difícil de cumprir. Os estados capitalistas políticos também devem tentar limitar a corrupção, que é inerente ao sistema, e seu complemento, a desigualdade galopante. O teste de seu modelo será sua capacidade de conter uma classe capitalista crescente que muitas vezes se irrita com o poder excessivo da burocracia estatal.
À medida que outras partes do mundo (notadamente os países africanos) tentam transformar suas economias e impulsionar o crescimento, as tensões entre os dois modelos se tornarão mais evidentes. A rivalidade entre a China e os Estados Unidos é frequentemente apresentada em termos simplesmente geopolíticos, mas, em sua essência, é como o atrito de duas placas tectônicas cuja fricção definirá como o capitalismo evolui neste século.
LIBERAL CAPITALISM
The global dominance of capitalism is one of two epochal changes that the world is living through. The other is the rebalancing of economic power between the West and Asia. For the first time since the Industrial Revolution, incomes in Asia are edging closer to those in western Europe and North America. In 1970, the West produced 56 percent of world economic output and Asia (including Japan) produced only 19 percent. Today, only three generations later, those proportions have shifted to 37 percent and 43 percent—thanks in large part to the staggering economic growth of countries such as China and India.
Capitalism in the West generated the information and communications technologies that enabled a new wave of globalization in the late twentieth century, the period when Asia began to narrow the gap with the “global North.” Anchored initially in the wealth of Western economies, globalization led to an overhaul of moribund structures and huge growth in many Asian countries. Global income inequality has dropped significantly from what it was in the 1990s, when the global Gini coefficient (a measure of income distribution, with zero representing perfect equality and one representing perfect inequality) was 0.70; today, it is roughly 0.60. It will drop further as incomes continue to rise in Asia.
Although inequality between countries has lessened, inequality within countries—especially those in the West—has grown. The United States’ Gini coefficient has risen from 0.35 in 1979 to about 0.45 today. This increase in inequality within countries is in large part a product of globalization and its effects on the more developed economies in the West: the weakening of trade unions, the flight of manufacturing jobs, and wage stagnation.
Liberal meritocratic capitalism came into being in the last 40 years. It can be best understood in comparison to two other variants: classical capitalism, which was predominant in the nineteenth and early twentieth centuries, and social democratic capitalism, which defined the welfare states in western Europe and North America from World War II to the early 1980s.
Capitalism in the West generated the information and communications technologies that enabled a new wave of globalization in the late twentieth century, the period when Asia began to narrow the gap with the “global North.” Anchored initially in the wealth of Western economies, globalization led to an overhaul of moribund structures and huge growth in many Asian countries. Global income inequality has dropped significantly from what it was in the 1990s, when the global Gini coefficient (a measure of income distribution, with zero representing perfect equality and one representing perfect inequality) was 0.70; today, it is roughly 0.60. It will drop further as incomes continue to rise in Asia.
Although inequality between countries has lessened, inequality within countries—especially those in the West—has grown. The United States’ Gini coefficient has risen from 0.35 in 1979 to about 0.45 today. This increase in inequality within countries is in large part a product of globalization and its effects on the more developed economies in the West: the weakening of trade unions, the flight of manufacturing jobs, and wage stagnation.
Liberal meritocratic capitalism came into being in the last 40 years. It can be best understood in comparison to two other variants: classical capitalism, which was predominant in the nineteenth and early twentieth centuries, and social democratic capitalism, which defined the welfare states in western Europe and North America from World War II to the early 1980s.
Embora a desigualdade entre países tenha diminuído, a desigualdade dentro dos países aumentou.
Unlike in the classical capitalism of the nineteenth century, when fortunes were to be made from owning, not working, rich individuals in the present system tend to be both capital rich and labor rich—that is, they generate their income both from investments and from work. They also tend to marry and make families with partners of similar educational and financial backgrounds, a phenomenon sociologists call “assortative mating.” Whereas the people at the top of the income distribution under classical capitalism were often financiers, today many of those at the top are highly paid managers, Web designers, physicians, investment bankers, and other elite professionals. These people work in order to earn their large salaries, but whether through an inheritance or their own savings, they also draw a great deal of income from their financial assets.
In liberal meritocratic capitalism, societies are more equal than they were during the phase of classical capitalism, women and ethnic minorities are more empowered to enter the workforce, and welfare provisions and social transfers (paid out of taxes) are employed in an attempt to mitigate the worst ravages of acute concentrations of wealth and privilege. Liberal meritocratic capitalism inherited those last measures from its direct predecessor, social democratic capitalism.
That model was structured around industrial labor and featured the strong presence of unions, which played a huge role in shrinking inequality. Social democratic capitalism presided over an era that saw measures such as the GI Bill and the 1950 Treaty of Detroit (a sweeping, union-negotiated contract for autoworkers) in the United States and economic booms in France and Germany, where incomes rose. Growth was distributed fairly evenly; populations benefited from better access to health care, housing, and inexpensive education; and more families could climb up the economic ladder.
But the nature of work has changed significantly under globalization and liberal meritocratic capitalism, especially with the winnowing away of the industrial working class and the weakening of labor unions. Since the late twentieth century, the share of capital income in total income has been rising—that is, an increasing portion of GDP belongs to the profits made by big corporations and the already wealthy. This tendency has been quite strong in the United States, but it has also been documented in most other countries, whether developing or developed. A rising share of capital income in total income implies that capital and capitalists are becoming more important than labor and workers, and so they acquire more economic and political power. It also means an increase in inequality, because those who draw a large share of their income from capital tend to be rich.
MALAISE IN THE WEST
While the current system has produced a more diverse elite (in terms of both gender and race), the setup of liberal capitalism has the consequence of at once deepening inequality and screening that inequality behind the veil of merit. More plausibly than their predecessors in the Gilded Age, the wealthiest today can claim that their standing derives from the virtue of their work, obscuring the advantages they have gained from a system and from social trends that make economic mobility harder and harder. The last 40 years have seen the growth of a semipermanent upper class that is increasingly isolated from the rest of society. In the United States, the top ten percent of wealth holders own more than 90 percent of the financial assets. The ruling class is highly educated, many of its members work, and their income from that labor tends to be high. They tend to believe that they deserve their high standing.
These elites invest heavily both in their progeny and in establishing political control. By investing in their children’s education, those at the top enable future generations of their kind to maintain high labor income and the elite status that is traditionally associated with knowledge and education. By investing in political influence—in elections, think tanks, universities, and so on—they ensure that they are the ones who determine the rules of inheritance, so that financial capital is easily transferred to the next generation. The two together (acquired education and transmitted capital) lead to the reproduction of the ruling class.
The formation of a durable upper class is impossible unless that class exerts political control. In the past, this happened naturally; the political class came mostly from the rich, and so there was a certain commonality of views and shared interests between politicians and the rest of the rich. That is no longer the case: politicians come from various social classes and backgrounds, and many of them share sociologically very little, if anything, with the rich. Presidents Bill Clinton and Barack Obama in the United States and Prime Ministers Margaret Thatcher and John Major in the United Kingdom all came from modest backgrounds but quite effectively supported the interests of the one percent.
In a modern democracy, the rich use their political contributions and the funding or direct ownership of think tanks and media outlets to purchase economic policies that benefit them: lower taxes on high incomes, bigger tax deductions, higher capital gains through tax cuts to the corporate sector, fewer regulations, and so on. These policies, in turn, increase the likelihood that the rich will stay on top, and they form the ultimate link in the chain that runs from the higher share of capital in a country’s net income to the creation of a self-serving upper class. If the upper class did not try to co-opt politics, it would still enjoy a very strong position; when it spends on electoral processes and builds its own civil society institutions, the position of the upper class becomes all but unassailable.
As the elites in liberal meritocratic capitalist systems become more cordoned off, the rest of society grows resentful. Malaise in the West about globalization is largely caused by the gap between the small number of elites and the masses, who have seen little benefit from globalization and, accurately or not, regard global trade and immigration as the cause of their ills. This situation eerily resembles what used to be called the “disarticulation” of Third World societies in the 1970s, such as was seen in Brazil, Nigeria, and Turkey. As their bourgeoisies were plugged into the global economic system, most of the hinterland was left behind. The disease that was supposed to affect only developing countries seems to have hit the global North.
Workers at a steel production plant in Jilin Province, China, 2006
Workers at a steel production plant in Jilin Province, China, 2006 Ian Teh / Panos Pictures / Redux
CHINA’S POLITICAL CAPITALISM
In Asia, globalization doesn’t have that same reputation: according to polls, 91 percent of people in Vietnam, for instance, think globalization is a force for good. Ironically, it was communism in countries such as China and Vietnam that laid the groundwork for their eventual capitalist transformation. The Chinese Communist Party came to power in 1949 by prosecuting both a national revolution (against foreign domination) and a social revolution (against feudalism), which allowed it to sweep away all ideologies and customs that were seen as slowing economic development and creating artificial class divisions. (The much less radical Indian independence struggle, in contrast, never succeeded in erasing the caste system.) These two simultaneous revolutions were a precondition, over the long term, for the creation of an indigenous capitalist class that would pull the economy forward. The communist revolutions in China and Vietnam played functionally the same role as the rise of the bourgeoisie in nineteenth-century Europe.
In China, the transformation from quasi feudalism to capitalism took place swiftly, under the control of an extremely powerful state. In Europe, where feudal structures were eradicated slowly over centuries, the state played a far less important role in the shift to capitalism. Given this history, then, it is no surprise that capitalism in China, Vietnam, and elsewhere in the region has so often had an authoritarian edge.
The system of political capitalism has three defining features. First, the state is run by a technocratic bureaucracy, which owes its legitimacy to economic growth. Second, although the state has laws, these are applied arbitrarily, much to the benefit of elites, who can decline to apply the law when it is inconvenient or apply it with full force to punish opponents. The arbitrariness of the rule of law in these societies feeds into political capitalism’s third defining feature: the necessary autonomy of the state. In order for the state to act decisively, it needs to be free from legal constraints. The tension between the first and second principles—between technocratic bureaucracy and the loose application of the law—produces corruption, which is an integral part of the way the political capitalist system is set up, not an anomaly.
In liberal meritocratic capitalism, societies are more equal than they were during the phase of classical capitalism, women and ethnic minorities are more empowered to enter the workforce, and welfare provisions and social transfers (paid out of taxes) are employed in an attempt to mitigate the worst ravages of acute concentrations of wealth and privilege. Liberal meritocratic capitalism inherited those last measures from its direct predecessor, social democratic capitalism.
That model was structured around industrial labor and featured the strong presence of unions, which played a huge role in shrinking inequality. Social democratic capitalism presided over an era that saw measures such as the GI Bill and the 1950 Treaty of Detroit (a sweeping, union-negotiated contract for autoworkers) in the United States and economic booms in France and Germany, where incomes rose. Growth was distributed fairly evenly; populations benefited from better access to health care, housing, and inexpensive education; and more families could climb up the economic ladder.
But the nature of work has changed significantly under globalization and liberal meritocratic capitalism, especially with the winnowing away of the industrial working class and the weakening of labor unions. Since the late twentieth century, the share of capital income in total income has been rising—that is, an increasing portion of GDP belongs to the profits made by big corporations and the already wealthy. This tendency has been quite strong in the United States, but it has also been documented in most other countries, whether developing or developed. A rising share of capital income in total income implies that capital and capitalists are becoming more important than labor and workers, and so they acquire more economic and political power. It also means an increase in inequality, because those who draw a large share of their income from capital tend to be rich.
MALAISE IN THE WEST
While the current system has produced a more diverse elite (in terms of both gender and race), the setup of liberal capitalism has the consequence of at once deepening inequality and screening that inequality behind the veil of merit. More plausibly than their predecessors in the Gilded Age, the wealthiest today can claim that their standing derives from the virtue of their work, obscuring the advantages they have gained from a system and from social trends that make economic mobility harder and harder. The last 40 years have seen the growth of a semipermanent upper class that is increasingly isolated from the rest of society. In the United States, the top ten percent of wealth holders own more than 90 percent of the financial assets. The ruling class is highly educated, many of its members work, and their income from that labor tends to be high. They tend to believe that they deserve their high standing.
These elites invest heavily both in their progeny and in establishing political control. By investing in their children’s education, those at the top enable future generations of their kind to maintain high labor income and the elite status that is traditionally associated with knowledge and education. By investing in political influence—in elections, think tanks, universities, and so on—they ensure that they are the ones who determine the rules of inheritance, so that financial capital is easily transferred to the next generation. The two together (acquired education and transmitted capital) lead to the reproduction of the ruling class.
The formation of a durable upper class is impossible unless that class exerts political control. In the past, this happened naturally; the political class came mostly from the rich, and so there was a certain commonality of views and shared interests between politicians and the rest of the rich. That is no longer the case: politicians come from various social classes and backgrounds, and many of them share sociologically very little, if anything, with the rich. Presidents Bill Clinton and Barack Obama in the United States and Prime Ministers Margaret Thatcher and John Major in the United Kingdom all came from modest backgrounds but quite effectively supported the interests of the one percent.
In a modern democracy, the rich use their political contributions and the funding or direct ownership of think tanks and media outlets to purchase economic policies that benefit them: lower taxes on high incomes, bigger tax deductions, higher capital gains through tax cuts to the corporate sector, fewer regulations, and so on. These policies, in turn, increase the likelihood that the rich will stay on top, and they form the ultimate link in the chain that runs from the higher share of capital in a country’s net income to the creation of a self-serving upper class. If the upper class did not try to co-opt politics, it would still enjoy a very strong position; when it spends on electoral processes and builds its own civil society institutions, the position of the upper class becomes all but unassailable.
As the elites in liberal meritocratic capitalist systems become more cordoned off, the rest of society grows resentful. Malaise in the West about globalization is largely caused by the gap between the small number of elites and the masses, who have seen little benefit from globalization and, accurately or not, regard global trade and immigration as the cause of their ills. This situation eerily resembles what used to be called the “disarticulation” of Third World societies in the 1970s, such as was seen in Brazil, Nigeria, and Turkey. As their bourgeoisies were plugged into the global economic system, most of the hinterland was left behind. The disease that was supposed to affect only developing countries seems to have hit the global North.
Workers at a steel production plant in Jilin Province, China, 2006
Workers at a steel production plant in Jilin Province, China, 2006 Ian Teh / Panos Pictures / Redux
CHINA’S POLITICAL CAPITALISM
In Asia, globalization doesn’t have that same reputation: according to polls, 91 percent of people in Vietnam, for instance, think globalization is a force for good. Ironically, it was communism in countries such as China and Vietnam that laid the groundwork for their eventual capitalist transformation. The Chinese Communist Party came to power in 1949 by prosecuting both a national revolution (against foreign domination) and a social revolution (against feudalism), which allowed it to sweep away all ideologies and customs that were seen as slowing economic development and creating artificial class divisions. (The much less radical Indian independence struggle, in contrast, never succeeded in erasing the caste system.) These two simultaneous revolutions were a precondition, over the long term, for the creation of an indigenous capitalist class that would pull the economy forward. The communist revolutions in China and Vietnam played functionally the same role as the rise of the bourgeoisie in nineteenth-century Europe.
In China, the transformation from quasi feudalism to capitalism took place swiftly, under the control of an extremely powerful state. In Europe, where feudal structures were eradicated slowly over centuries, the state played a far less important role in the shift to capitalism. Given this history, then, it is no surprise that capitalism in China, Vietnam, and elsewhere in the region has so often had an authoritarian edge.
The system of political capitalism has three defining features. First, the state is run by a technocratic bureaucracy, which owes its legitimacy to economic growth. Second, although the state has laws, these are applied arbitrarily, much to the benefit of elites, who can decline to apply the law when it is inconvenient or apply it with full force to punish opponents. The arbitrariness of the rule of law in these societies feeds into political capitalism’s third defining feature: the necessary autonomy of the state. In order for the state to act decisively, it needs to be free from legal constraints. The tension between the first and second principles—between technocratic bureaucracy and the loose application of the law—produces corruption, which is an integral part of the way the political capitalist system is set up, not an anomaly.
O reverso da moeda do crescimento astronômico da China tem sido o seu enorme aumento na desigualdade.
Since the end of the Cold War, these characteristics have helped supercharge the growth of ostensibly communist countries in Asia. Over a 27-year period ending in 2017, China’s growth rate averaged about eight percent and Vietnam’s averaged around six percent, compared with just two percent in the United States.
The flip side of China’s astronomic growth has been its massive increase in inequality. From 1985 to 2010, the country’s Gini coefficient leapt from 0.30 to around 0.50—higher than that of the United States and closer to the levels found in Latin America. Inequality in China has risen starkly within both rural and urban areas, and it has risen even more so in the country as a whole because of the increasing gap between those areas. That growing inequality is evident in every divide—between rich and poor provinces, high-skilled workers and low-skilled workers, men and women, and the private sector and the state sector.
Notably, there has also been an increase in China in the share of income from privately owned capital, which seems to be as concentrated there as in the advanced market economies of the West. A new capitalist elite has formed in China. In 1988, skilled and unskilled industrial workers, clerical staff, and government officials accounted for 80 percent of those in the top five percent of income earners. By 2013, their share had fallen by almost half, and business owners (20 percent) and professionals (33 percent) had become dominant.
A remarkable feature of the new capitalist class in China is that it has emerged from the soil, so to speak, as almost four-fifths of its members report having had fathers who were either farmers or manual laborers. This intergenerational mobility is not surprising in view of the nearly complete obliteration of the capitalist class after the Communists’ victory in 1949 and then again during the Cultural Revolution in the 1960s. But that mobility may not continue in the future, when—given the concentration of ownership of capital, the rising costs of education, and the importance of family connections—the intergenerational transmission of wealth and power should begin to mirror what is observed in the West.
Compared with its Western counterparts, however, this new capitalist class in China may be more of a class by itself than a class for itself. China’s many byzantine forms of ownership—which at the local and national levels blur the lines between public and private—allow the political elite to restrain the power of the new capitalist, economic elite.
For millennia, China has been home to strong, fairly centralized states that have always prevented the merchant class from becoming an independent center of power. According to the French scholar Jacques Gernet, wealthy merchants under the Song dynasty in the thirteenth century never succeeded in creating a self-conscious class with shared interests because the state was always there ready to check their power. Although merchants continued to prosper as individuals (as the new capitalists largely do nowadays in China), they never formed a coherent class with its own political and economic agenda or with interests that were forcefully defended and propagated. This scenario, according to Gernet, differed markedly from the situation around the same time in Italian merchant republics and the Low Countries. This pattern of capitalists enriching themselves without exercising political power will likely continue in China and in other political capitalist countries, as well.
A CLASH OF SYSTEMS
As China expands its role on the international stage, its form of capitalism is invariably coming into conflict with the liberal meritocratic capitalism of the West. Political capitalism might supplant the Western model in many countries around the world.
The advantage of liberal capitalism resides in its political system of democracy. Democracy is desirable in itself, of course, but it also has an instrumental advantage. By requiring constant consultation of the population, democracy provides a powerful corrective to economic and social trends that may be detrimental to the common good. Even if people’s decisions sometimes result in policies that reduce the rate of economic growth, increase pollution, or lower life expectancy, democratic decision-making should, within a relatively limited time period, correct such developments.
Political capitalism, for its part, promises much more efficient management of the economy and higher growth rates. The fact that China has been by far the most economically successful country in the past half century places it in a position to legitimately try to export its economic and political institutions. It is doing that most prominently through the Belt and Road Initiative, an ambitious project to link several continents through improved, Chinese-financed infrastructure. The initiative represents an ideological challenge to the way the West has been handling economic development around the world. Whereas the West focuses on building institutions, China is pouring money into building physical things. The BRI will link partnered countries into a Chinese sphere of influence. Beijing even has plans to handle future investment disputes under the jurisdiction of a Chinese-created court—quite a reversal for a country whose “century of humiliation” in the nineteenth century was capped by Americans and Europeans in China refusing to be subject to Chinese laws.
Many countries may welcome being part of the BRI. Chinese investment will bring roads, harbors, railways, and other badly needed infrastructure, and without the type of conditions that often accompany Western investment. China has no interest in the domestic policies of recipient nations; instead, it emphasizes equality in the treatment of all countries. This is an approach that many officials in smaller countries find particularly attractive. China is also seeking to build international institutions, such as the Asian Infrastructure Investment Bank, following the playbook of the United States after World War II, when Washington spearheaded the creation of the World Bank and the International Monetary Fund.
Beijing has another reason to be more active on the international stage. If China refused to advertise its own institutions while the West continued to advance the values of liberal capitalism in China, large swaths of the Chinese population could become more attracted to Western institutions. The current disturbances in Hong Kong have failed to spread anywhere else in China, but they do illustrate real discontent with the arbitrary application of the law, discontent that may not be confined to the former British colony. The blatant censorship of the Internet is also deeply unpopular among the young and educated.
By projecting the advantages of its political capitalism abroad, China will reduce the appeal of the Western liberal model to its own citizens. Its international activities are essentially matters of domestic survival. Whatever formal or informal arrangement Beijing reaches with states that embrace political capitalism, China is bound to exercise increasing influence on international institutions, which in the past two centuries have been built exclusively by Western states, to serve Western interests.
A Chinese construction worker in Colombo, Sri Lanka, June 2018
A Chinese construction worker in Colombo, Sri Lanka, June 2018 Adam Dean / The New York Times / Redux
THE FUTURE OF CAPITALISM
John Rawls, the consummate philosopher of modern liberalism, argued that a good society ought to give absolute priority to basic liberties over wealth and income. Experience shows, however, that many people are willing to trade democratic rights for greater income. One need simply observe that within companies, production is generally organized in the most hierarchical fashion, not the most democratic. Workers do not vote on the products they would like to produce or on how they would like to produce them. Hierarchy produces greater efficiency and higher wages. “Technique is the boundary of democracy,” the French philosopher Jacques Ellul wrote more than half a century ago. “What technique wins, democracy loses. If we had engineers who were popular with the workers, they would be ignorant of machinery.” The same analogy can be extended to society as a whole: democratic rights can be, and have been, given up willingly for higher incomes.
In today’s commercialized and hectic world, citizens rarely have the time, the knowledge, or the desire to get involved in civic matters unless the issues directly concern them. It is telling that in the United States, one of the oldest democracies in the world, the election of a president, who, in many respects in the American system, has the prerogatives of an elected king, is not judged of sufficient importance to bestir more than half the electorate to go to the polls. In this respect, political capitalism asserts its superiority.
The problem, however, is that in order to prove its superiority and ward off a liberal challenge, political capitalism needs to constantly deliver high rates of growth. So while liberal capitalism’s advantages are natural, in that they are built into the setup of the system, the advantages of political capitalism are instrumental: they must be constantly demonstrated. Political capitalism starts with the handicap of needing to prove its superiority empirically. It faces two further problems, as well. Relative to liberal capitalism, political capitalism has a greater tendency to generate bad policies and bad social outcomes that are difficult to reverse because those in power do not have an incentive to change course. It can also easily engender popular dissatisfaction because of its systemic corruption in the absence of a clear rule of law.
The flip side of China’s astronomic growth has been its massive increase in inequality. From 1985 to 2010, the country’s Gini coefficient leapt from 0.30 to around 0.50—higher than that of the United States and closer to the levels found in Latin America. Inequality in China has risen starkly within both rural and urban areas, and it has risen even more so in the country as a whole because of the increasing gap between those areas. That growing inequality is evident in every divide—between rich and poor provinces, high-skilled workers and low-skilled workers, men and women, and the private sector and the state sector.
Notably, there has also been an increase in China in the share of income from privately owned capital, which seems to be as concentrated there as in the advanced market economies of the West. A new capitalist elite has formed in China. In 1988, skilled and unskilled industrial workers, clerical staff, and government officials accounted for 80 percent of those in the top five percent of income earners. By 2013, their share had fallen by almost half, and business owners (20 percent) and professionals (33 percent) had become dominant.
A remarkable feature of the new capitalist class in China is that it has emerged from the soil, so to speak, as almost four-fifths of its members report having had fathers who were either farmers or manual laborers. This intergenerational mobility is not surprising in view of the nearly complete obliteration of the capitalist class after the Communists’ victory in 1949 and then again during the Cultural Revolution in the 1960s. But that mobility may not continue in the future, when—given the concentration of ownership of capital, the rising costs of education, and the importance of family connections—the intergenerational transmission of wealth and power should begin to mirror what is observed in the West.
Compared with its Western counterparts, however, this new capitalist class in China may be more of a class by itself than a class for itself. China’s many byzantine forms of ownership—which at the local and national levels blur the lines between public and private—allow the political elite to restrain the power of the new capitalist, economic elite.
For millennia, China has been home to strong, fairly centralized states that have always prevented the merchant class from becoming an independent center of power. According to the French scholar Jacques Gernet, wealthy merchants under the Song dynasty in the thirteenth century never succeeded in creating a self-conscious class with shared interests because the state was always there ready to check their power. Although merchants continued to prosper as individuals (as the new capitalists largely do nowadays in China), they never formed a coherent class with its own political and economic agenda or with interests that were forcefully defended and propagated. This scenario, according to Gernet, differed markedly from the situation around the same time in Italian merchant republics and the Low Countries. This pattern of capitalists enriching themselves without exercising political power will likely continue in China and in other political capitalist countries, as well.
A CLASH OF SYSTEMS
As China expands its role on the international stage, its form of capitalism is invariably coming into conflict with the liberal meritocratic capitalism of the West. Political capitalism might supplant the Western model in many countries around the world.
The advantage of liberal capitalism resides in its political system of democracy. Democracy is desirable in itself, of course, but it also has an instrumental advantage. By requiring constant consultation of the population, democracy provides a powerful corrective to economic and social trends that may be detrimental to the common good. Even if people’s decisions sometimes result in policies that reduce the rate of economic growth, increase pollution, or lower life expectancy, democratic decision-making should, within a relatively limited time period, correct such developments.
Political capitalism, for its part, promises much more efficient management of the economy and higher growth rates. The fact that China has been by far the most economically successful country in the past half century places it in a position to legitimately try to export its economic and political institutions. It is doing that most prominently through the Belt and Road Initiative, an ambitious project to link several continents through improved, Chinese-financed infrastructure. The initiative represents an ideological challenge to the way the West has been handling economic development around the world. Whereas the West focuses on building institutions, China is pouring money into building physical things. The BRI will link partnered countries into a Chinese sphere of influence. Beijing even has plans to handle future investment disputes under the jurisdiction of a Chinese-created court—quite a reversal for a country whose “century of humiliation” in the nineteenth century was capped by Americans and Europeans in China refusing to be subject to Chinese laws.
Many countries may welcome being part of the BRI. Chinese investment will bring roads, harbors, railways, and other badly needed infrastructure, and without the type of conditions that often accompany Western investment. China has no interest in the domestic policies of recipient nations; instead, it emphasizes equality in the treatment of all countries. This is an approach that many officials in smaller countries find particularly attractive. China is also seeking to build international institutions, such as the Asian Infrastructure Investment Bank, following the playbook of the United States after World War II, when Washington spearheaded the creation of the World Bank and the International Monetary Fund.
Beijing has another reason to be more active on the international stage. If China refused to advertise its own institutions while the West continued to advance the values of liberal capitalism in China, large swaths of the Chinese population could become more attracted to Western institutions. The current disturbances in Hong Kong have failed to spread anywhere else in China, but they do illustrate real discontent with the arbitrary application of the law, discontent that may not be confined to the former British colony. The blatant censorship of the Internet is also deeply unpopular among the young and educated.
By projecting the advantages of its political capitalism abroad, China will reduce the appeal of the Western liberal model to its own citizens. Its international activities are essentially matters of domestic survival. Whatever formal or informal arrangement Beijing reaches with states that embrace political capitalism, China is bound to exercise increasing influence on international institutions, which in the past two centuries have been built exclusively by Western states, to serve Western interests.
A Chinese construction worker in Colombo, Sri Lanka, June 2018
A Chinese construction worker in Colombo, Sri Lanka, June 2018 Adam Dean / The New York Times / Redux
THE FUTURE OF CAPITALISM
John Rawls, the consummate philosopher of modern liberalism, argued that a good society ought to give absolute priority to basic liberties over wealth and income. Experience shows, however, that many people are willing to trade democratic rights for greater income. One need simply observe that within companies, production is generally organized in the most hierarchical fashion, not the most democratic. Workers do not vote on the products they would like to produce or on how they would like to produce them. Hierarchy produces greater efficiency and higher wages. “Technique is the boundary of democracy,” the French philosopher Jacques Ellul wrote more than half a century ago. “What technique wins, democracy loses. If we had engineers who were popular with the workers, they would be ignorant of machinery.” The same analogy can be extended to society as a whole: democratic rights can be, and have been, given up willingly for higher incomes.
In today’s commercialized and hectic world, citizens rarely have the time, the knowledge, or the desire to get involved in civic matters unless the issues directly concern them. It is telling that in the United States, one of the oldest democracies in the world, the election of a president, who, in many respects in the American system, has the prerogatives of an elected king, is not judged of sufficient importance to bestir more than half the electorate to go to the polls. In this respect, political capitalism asserts its superiority.
The problem, however, is that in order to prove its superiority and ward off a liberal challenge, political capitalism needs to constantly deliver high rates of growth. So while liberal capitalism’s advantages are natural, in that they are built into the setup of the system, the advantages of political capitalism are instrumental: they must be constantly demonstrated. Political capitalism starts with the handicap of needing to prove its superiority empirically. It faces two further problems, as well. Relative to liberal capitalism, political capitalism has a greater tendency to generate bad policies and bad social outcomes that are difficult to reverse because those in power do not have an incentive to change course. It can also easily engender popular dissatisfaction because of its systemic corruption in the absence of a clear rule of law.
Ao contrário do capitalismo liberal, o capitalismo político precisa estar permanentemente em alerta.
O capitalismo político precisa se vender com base na capacidade de proporcionar melhor gestão social, taxas de crescimento mais elevadas e uma administração mais eficiente (incluindo a administração da justiça). Ao contrário do capitalismo liberal, que pode adotar uma postura mais relaxada em relação a problemas temporários, o capitalismo político precisa estar permanentemente alerta. Isso pode, no entanto, ser visto como uma vantagem do ponto de vista darwinista social: devido à pressão constante para oferecer mais aos seus constituintes, o capitalismo político pode aprimorar sua capacidade de gerir a esfera econômica e continuar a fornecer, ano após ano, mais bens e serviços do que sua contraparte liberal. O que a princípio parece um defeito pode se revelar uma vantagem.
Mas será que os novos capitalistas da China irão se conformar para sempre com um status quo em que seus direitos formais podem ser limitados ou revogados a qualquer momento e em que estão sob a tutela constante do Estado? Ou, à medida que se tornam mais fortes e mais numerosos, irão se organizar, influenciar o Estado e, finalmente, tomá-lo, como aconteceu nos Estados Unidos e na Europa? O caminho ocidental, conforme delineado por Karl Marx, parece ter uma lógica inabalável: o poder econômico tende a se emancipar e a zelar por, ou impor, seus próprios interesses. Mas o histórico de quase 2.000 anos de uma parceria desigual entre o Estado chinês e as empresas chinesas representa um grande obstáculo para que a China siga o mesmo caminho do Ocidente.
A questão fundamental é se os capitalistas chineses chegarão a controlar o Estado e se, para isso, usarão a democracia representativa. Nos Estados Unidos e na Europa, os capitalistas usaram essa solução com muita cautela, administrando-a em doses homeopáticas à medida que o direito ao voto se expandia lentamente e negando-a sempre que houvesse uma ameaça potencial às classes proprietárias (como na Grã-Bretanha após a Revolução Francesa, quando o direito ao voto se tornou ainda mais restrito). A democracia chinesa, se vier a existir, provavelmente se assemelhará à democracia no resto do mundo hoje, no sentido jurídico de garantir um voto por pessoa. Contudo, dado o peso da história e a natureza precária e o tamanho ainda limitado das classes proprietárias da China, não é certo que o domínio da classe média possa ser mantido na China. Ele fracassou na primeira parte do século XX sob a República da China (que dominou grande parte do continente de 1912 a 1949); somente com grande dificuldade será restabelecido com maior sucesso 100 anos depois.
CONVERGÊNCIA PLUTOCRÁTICA?
O que o futuro reserva para as sociedades capitalistas ocidentais? A resposta depende de o capitalismo liberal meritocrático ser capaz de avançar para um estágio mais avançado, o que poderia ser chamado de “capitalismo do povo”, no qual a renda proveniente de ambos os fatores de produção, capital e trabalho, seria distribuída de forma mais equitativa. Isso exigiria ampliar a propriedade significativa de capital muito além dos atuais 10% mais ricos da população e tornar o acesso às melhores escolas e aos empregos mais bem remunerados independente da origem familiar.
Para alcançar maior igualdade, os países devem desenvolver incentivos fiscais para encorajar a classe média a deter mais ativos financeiros, implementar impostos de herança mais elevados para os muito ricos, melhorar a educação pública gratuita e estabelecer campanhas eleitorais financiadas publicamente. O efeito cumulativo dessas medidas seria o de tornar mais difusa a propriedade de capital e habilidades na sociedade. O capitalismo popular seria semelhante ao capitalismo social-democrata em sua preocupação com a desigualdade, mas aspiraria a um tipo diferente de igualdade; em vez de se concentrar na redistribuição de renda, esse modelo buscaria maior igualdade de ativos, tanto financeiros quanto em termos de habilidades. Ao contrário do capitalismo social-democrata, ele exigiria apenas políticas redistributivas modestas (como vale-alimentação e auxílio-moradia), porque já teria alcançado uma base maior de igualdade.
Se não conseguirem abordar o problema da crescente desigualdade, os sistemas capitalistas meritocráticos liberais correm o risco de trilhar outro caminho — não em direção ao socialismo, mas em direção a uma convergência com o capitalismo político. A elite econômica no Ocidente se tornará mais isolada, exercendo um poder mais irrestrito sobre sociedades ostensivamente democráticas, de maneira muito semelhante à forma como a elite política na China domina o país. Quanto mais o poder econômico e político nos sistemas capitalistas liberais se fundirem, mais o capitalismo liberal se tornará plutocrático, assumindo algumas características do capitalismo político. Neste último modelo, a política é o meio para obter benefícios econômicos; no capitalismo plutocrático — antes meritocrático liberal —, o poder econômico conquistará a política. O ponto final dos dois sistemas será o mesmo: o fechamento das fileiras de uma minoria privilegiada e a reprodução dessa elite indefinidamente no futuro.
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